Singapore has repositioned itself as a vibrant and innovative economy as Asia plays an increasingly larger role in global trade and investment flows. We take a look at the demand drivers and major trends in the property market for the city-state.

1. Office rents to rise 15% till 2020: Singapore continues to be the hub of Asia – outperforming key cities including Hong Kong and China – in attracting corporate headquarters. Strong demand for office space continues to come from technology companies, professional services firms and flexible workspace providers. However, new supply is limited and potentially could reduce further if redevelopment projects are initiated. we forecast office rents to grow by 15% till 2020.
2. Residential developers navigate new normal: As the government has started to reintroduce cooling measures in the residential market, developers have to navigate lower sale volumes, higher pipeline supply and higher minimum average unit size requirements. However, Singapore continues to stand out as a safe haven for capital preservation due to its quality of life, resilient currency and we expect downside to residential prices to be limited.
3. Reinventing retail: Landlords and retailers are exploring new ways to surprise and engage customers with new social concepts and experiences. Food and beverage, fitness and fun – activities like indoor arcades and VR studios – continue to activate retail space. Retailers and owners that use technology and data to integrate both online and physical point of sales are winning market share. Singapore’s retail rents are expected to trend up up in the next 4 years due to limited new supply.
4. Crazy Rich Asians spur tourism: Visitors to Singapore are estimated to have increased by 7% in 2018 – whether the blockbuster film Crazy Rich Asians directly caused the increase is still up for debate. The influx in tourists spurred hotel RevPAR to rise for the first time in 6 years in by c. 5% yoy. We expect strong growth in occupancy and room rates in the next four years due to limited supply, and this optimistic outlook is reflected in prices paid in recent hotel transactions.

The outlook for Singapore in 2019 is positive as the economy continues to adapt to the competitive global landscape and an increasingly technology-driven environment. As a result, Singapore’s office rental growth rate expected in the year ahead is one of the highest in the Asia Pacific region.

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